Carrefour’s Brazil business has reported strong quarterly and full year results for 2018, cementing its position as Brazil’s largest food retailer. The retailer said it continues to strengthen its multi-channel portfolio and quicken the pace of expanding its Atacadão banner.
“Grupo Carrefour Brazil maintained its leadership in Brazil's food retail market in 2018 with a very strong performance both in Q4 and in the full year. Sales growth accelerated consistently during the year, with all formats contributing, and adjusted net income reached its highest-ever level.”
Noël Prioux, CEO of Grupo Carrefour Brazil
Gross sales grew 7.6% year-on-year (YOY)…
Consolidated sales were BR$56.3bn (US$14.9bn) for FY 2018, a 7.6% increase year-on-year (YOY). Like-for-like (LFL) sales grew consistently each quarter and were up by 6.2% in Q4 (+3.9% FY).
…with first double-digit quarterly growth in two years
Total sales rose by 10.2% to BR$15.8bn (US$4.2bn) in Q4. This is Carrefour Brazil’s first double-digit sales growth in a single quarter since Q4 2016.
Atacadão key to driving improved sales performance
Carrefour Brazil’s strong sales performance can be largely attributed to the success of its Atacadão cash & carry banner. Annual sales for Atacadão were up 10.2% YOY to BR$37.6 billion (US$10bn) (+14.9% in Q4). This was driven by both improved LFL sales (+4.8%) and store expansion (+5.6%). Comparatively, annual sales growth for Carrefour Brazil’s hypermarkets and supermarkets were up just 2.6% YOY.
Carrefour Brazil grew sales space 6.3% in 2018…
During 2018 Carrefour opened 38 stores across all formats, growing total sales space by 6.3%. Expanding its store network contributed to 4% of sales growth in 2018 (4.3% of sales in Q4).
In 2018 Carrefour quickened the pace of the expansion of its Atacadão banner. At the start of the year the business announced plans to extend the number of openings from 10-12 per year to 20 in 2018. The business successfully achieved this target, with most stores opened in areas where there was formerly no Atacadão presence. Carrefour Brazil has said it will continue opening c. 20 stores per year in the medium-term.
In Q4 Carrefour Brazil opened six cash & carry stores, two wholesale, four Market and two Express convenience stores.
…whilst continuing to strengthen its multichannel portfolio
The Market proximity banner was launched in December 2017. The business now has nine stores under the banner and Carrefour said they are performing above expectations.
Carrefour Brazil has invested in refining the assortment of products in its Express format, including adding more fresh lines. It has also been implementing more services such as ATM’s and bill-payment facilities. These factors have helped to contribute to double-digit LFL growth in Q4. In recent months Carrefour has also been piloting the use of Scan and Go pay technology in some of its city-centre based Express stores.
The business has introduced click and collect into all its hypermarkets. It plans to further extend click and collect by adding pick-up points in third party locations and in its Market and Express formats.
Rapid expansion to continue in 2019…
Carrefour has said it will invest BR$2bn (US$529m) in its Brazil operations in 2019. The business expects to open at least 20 Atacadão stores and 30 convenience stores (under its Carrefour Market and Carrefour Express banners). Atacadão president Roberto Müssnich believes this number could be even greater dependent on the number of opportunities. Carrefour is also assessing the potential of opening smaller sized stores in large cities around the country.
Ecommerce remains fastest growing channel
Ecommerce was Carrefour’s fastest growing channel in Q4. Gross Merchandise Volume grew five times quicker than the industry. For FY 2018, GMV reached BR$1.4bn (US$371m) (+110% YOY), which accounted for 9% of Carrefour Brazil’s gross sales for the year (excl. petrol).
Carrefour eBusiness Brazil (CeBB) launched to accelerate digital transformation
On 1 February 2019 Carrefour Brazil launched a new business platform, Carrefour eBusiness Brazil (CeBB). This centralises many of Carrefour Brazil’s digital initiatives, which were previously managed across multiple departments.
The launch of CeBB will help to accelerate the business’ digital transformation. There will be a stronger focus on its ecommerce food offering, which supports Carrefours aim of the being the Brazilian market leader in this area.